Ask SAHM is a place where you can ask our staff & community a question safely & anonymously. Please read our disclaimer.

Is it a good time to buy a house if the entire world is sinking into a recession?

What are the risks here? I guess the obvious one is the possibility of losing your job & not being able to pay the mortgage. Anything else?

Report

Answers (1)

We went to a mortgage broker and (I didn't know this) but when we asked how much we could borrow, they based it on a higher interest rate 7.25% instead of the very low rate ATM... This cut what we could borrow to less than half so I think a lot of people trying to enter the market now won't be able to because of this.

 See we had a similar but slightly different thing. We were told we could borrow a huge amount, at a low rate. But because we had been burned before by a mortgage arsehole, we borrowed HALF that amount. Good thing too because, my husband was made redundant 6 months later and his next job didn't pay as much. Maybe the broker is being cautious and looking out for your best interests by going with the higher rate. So you don't have to try and scramble sell if the variable rate goes up.... unless you could have a fixed low interest rate for the entire mortgage, in which case, punch your broker in the dick.
helpful (0) 
 This is what they do now following all the banking reforms
helpful (0) 
 Tbh in the end it's your own responsibility what you choose to borrow. The broker evaluates your expenses & ability to pay, presents you with the options (given by software, not opinion) & you choose. So although they do have to show responsible lending, in the end it's your money & your responsibility to understand what you can afford to borrow.
If a broker pushes you to borrow a high amount, just walk away.

helpful (1)